Chandigarh

StateCommission

CC/280/2018

M/s Qualitat Products (India) - Complainant(s)

Versus

Bank of India - Opp.Party(s)

07 Jul 2022

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Consumer Complaint No.	:	280 of 2018
Date of Institution	:	09.07.2018
Date of Decision	:	07.07.2022

 

 

M/s Qualitat Products (India), S.C.O. 292, 2^nd Floor, Sector 32-D, Chandigarh through its Proprietor Sh. Anil Berry.

…..Complainant.

VERSUS

 

1. Bank of India, S.C.O. 292, 1^st Floor, Sector 32-D, Chandigarh through its Branch Manager.
2. National Insurance Company Limited, S.C.O. 305-306, Sector 35-B, Chandigarh through its Branch Manager.

....Opposite Parties.

 

Complaint under Section 17 of Consumer Protection Act, 1986

 

 

BEFORE:   JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.

                MRS. PADMA PANDEY, MEMBER

                MR. RAJESH K. ARYA, MEMBER.

 

PRESENT:

Sh. Ravinder Pal Singh, Advocate for the complainant.

Sh. Anil Malhotra, Advocate for opposite party No.1.

Sh. J. P. Nahar, Advocate for opposite party No.2.   

 

RAJESH  K. ARYA, MEMBER 

                   Briefly stated the facts are that the complainant firm [M/s Qualitat Products (India)], which is in business of trading of veterinary medicines and genetics and importing as well as manufacturing of feed supplements, has a cash credit account with Opposite Party No.1 (Bank of India) and in order to secure its debits, got insured its veterinary medicines and genetics and importing as well as manufacturing of feed supplements from Opposite Party No.2 (National Insurance Company Limited) and also took a Burglary Insurance Policy No.42101/46/14/7500000376, Annexure C-1, valid for the period from 30.01.2015 till 29.01.2016. The sum assured under the said Policy was Rs.2,25,00,000/- on stock of medicines & similar nature of goods. It is averred that earlier, the complainant was running its business at S.C.O. 283, Sector 32-D, Chandigarh and subsequently, it shifted its office to S.C.O. 292, 2^nd Floor, Sector 32-D, Chandigarh in the month of November 2012 and due intimation qua change of address was given by hand to opposite party No.1 vide letter dated 19.09.2013, Annexure C-3, at its office being on the 1^st Floor of S.C.O. 292 and same was also addressed to opposite party No.2 by courier asking them to endorse the address in their official records.

2.                It is further averred that unfortunately, in the intervening night of 16/17 September 2015, a theft took place in the office of the complainant, wherein, number of articles i.e. 28,015 number of doses were stolen and the total loss was worked out to the tune of Rs.45.20 Lakhs. It is further averred that complaint qua burglary was lodged with P.S. Sector 34, Chandigarh and intimation was also given to the opposite party. It is further averred that opposite party No.2 appointed its surveyor & Loss Assessor to assess the loss. The said Surveyor, after visiting the spot and carrying out the necessary inspection, demanded certain documents from the complainant, which were duly supplied and correspondence inter se the Surveyor, opposite party and the complainant took place, which has been placed on record as Annexure C-7 (Colly.). It is further averred that the complainant ran from pillar to post for settlement of its claim but opposite party No.2 even stopped entertaining the complainant, for which, the complainant sent letter dated 01.03.2016, Annexure C-8, to opposite party No.2 to settle the claim at the earliest. It is further averred that the surveyor submitted its report to opposite party No.2 somewhere in the month of April 2016 and when enquired, opposite party No.2 informed that claim is under process and would be settled soon, however, it flatly refused to supply copy of surveyor report to the complainant.

3.                It is further averred that the complainant was shocked to receive a letter dated 18.07.2016 on 04.08.2016 from opposite party No.2 that intimation with regard to change of address was never received by opposite party No.2 and hence the premises was not insured at the time of loss. It is further averred that in the said letter, it was intimated that the stock stored “Animal Semen”, which was neither medicine nor similar nature of goods, is not covered under the purview of the policy. It is further averred that the claim of the complainant was repudiated by opposite party No.2 vide letter dated 18.10.2016, Annexure C-15, on flimsy ground that the premises was not insured under the policy on the date of loss and the said repudiation was done during the pendency of the complaint. It is further averred that opposite party No.2 is having a tie up with opposite party No.1 with regard to the insurance business and it was the primary duty of opposite party No.1 to immediately intimate opposite party No.2 with regard to the change of address by the complainant on 19.09.2013, as opposite party No.1 on its own has got the stock of the complainant insured with opposite party No.2 by charging premium from the complainant.

4.                Alleging aforesaid acts of the opposite parties as deficiency in rendering service and unfair trade practice on the part of the opposite parties, the complainant has filed the present complaint seeking directions to the opposite parties to pay the claim amount of Rs.45.20 Lakhs to the complainant alongwith interest @18% p.a. from the date of loss till actual payment; further pay Rs.10 Lakhs as compensation for mental harassment & agony and Rs.1,50,000/- as litigation expenses.

5.                Opposite Party No.1 (Bank of India), in its reply, while admitting the factual matrix of the case, has pleaded that opposite party No.2 (National Insurance Company Limited) was aware about the change of place of business as the copy of stock statement submitted by the complainant was supplied to the official of opposite party No.2, for verification of the stock and the stock was always verified by the Insurance agent of opposite party No.2, before issuing the insurance policy. It has further been pleaded that while renewing the policy, it kept on mentioning the address, given in the previous policy and it was mandatory for opposite party No.2 to verify the stock before its insurance. It has further been pleaded that the change of address was also intimated by opposite party No.1 to the official of opposite party No.2. It has further been pleaded that it is an obligation of the primary insured to keep the insurance company informed about the change of address, if any. It has further been pleaded that there is no privity of contract between opposite party No.1 and opposite party No.2, therefore, opposite party No.1 is under no obligation. Pleading no deficiency in rendering service on its part, opposite party No.1 prayed for dismissal of the complaint.

6.                Opposite party No.2 (National Insurance Company Limited), in its reply, admitted that opposite party No.1 (Bank of India) in order to protect its financial interest had proposed for burglary insurance on 24.01.2008 on the stock of medicine and similar nature of goods belonging to the complainant for a sum of Rs.57 Lakhs vide proposal form dated 24.01.2008, Annexure OP-2/1. It has further been pleaded that the policy was issued in the year 2008 based on the proposal form and the same was subsequently renewed year after year. It has further been pleaded that the proposal form is the basis of issuance of the insurance policy and is always subject to terms, conditions and exclusions contained therein. It has further been pleaded that the complainant can take any number of premises on lease, as he chooses, retaining the existing premises as well but opposite party No.2 would be liable if the goods are burgled from the premises insured under the policy. It has further been pleaded that per Annexure C-5, in most of the pages, the address mentioned is SCO No.283, Sector 32-D, Chandigarh, which goes on to prove that the complainant was operating from the said SCO and also from SCO No.292, Sector 32-D, Chandigarh. It has specifically been denied that the alleged letter dated 19.09.2013 was ever received by opposite party No.2. It has further been pleaded that if opposite party No.1 had received letter dated 19.09.2013 but did not inform opposite party No.2, then opposite party No.1 alone is responsible for the lapse and liable to pay the loss claimed by the complainant. It has further been pleaded that even at the subsequent renewal for the period 30.01.2014 to 29.01.2015, opposite party No.1 did not request for the change of address and no objection was raised by the complainant or by opposite party No.1. It has further been pleaded that it was the duty of opposite party No.1 and the complainant to get the change of address recorded in the insurance policy as any alteration in the contract could be done by the consent of both the parties. The copy of complete investigation report has been placed on record by opposite party No.2 as Annexure OP-2/3. It has further been pleaded that the Surveyor & Loss Assessor assessed the loss for Rs.36,42,171/- vide its report dated 21.04.2016, Annexure OP-2/5. It has further been pleaded that as per report/information dated 30.09.2016, Annexure OP-2/6 (colly.),  obtained from Drug Control Officer, U.T., Chandigarh , Bull Semen is not a medicine or similar nature of goods. It has further been pleaded that the claim of the complainant was rightly repudiated vide letter dated 18.10.2016, Annexure OP-2/7. Pleading no deficiency in rendering service on its part, opposite party No.2 prayed for dismissal of the complaint.

7.                The complainant filed rejoinder wherein it reiterated the averments made in the complaint and repudiated those as mentioned in the written statements filed by the opposite parties.

8.                The parties led evidence in support of their respective cases.

9.                We have heard the Counsel for the parties and have gone through the entire record and the written arguments of the parties very carefully.

Disposal of Miscellaneous Applications:-

10.              Before dwelling on to the merits of the case, we would like to first dispose of Miscellaneous Applications bearing Nos.866 of 2020 and 229 of 2022.

11.              MA/866/2020 has been filed by the complainant for leading additional evidence by placing on record opinion report dated 26.11.2020 as Exhibit C-17, accompanied by the affidavit of Sh. Vinay Mittal, Surveyor and Loss Assessor. The application was duly contested by the opposite parties by filing their respective replies, stating that since this report has been prepared by Sh. Vinay Mittal on the asking of the complainant, thus, no value can be attached to such a report where the opposite parties were not associated at all. However, after going through the application and the supporting document(s), we are of the concerted view that the document i.e. opinion report dated 26.11.2020 as Exhibit C-17, accompanied by the affidavit of Sh. Vinay Mittal, Surveyor and Loss Assessor, sought to be placed on record could be of some help  and as such, the application is allowed that opinion report dated 26.11.2020 as Exhibit C-17, accompanied by the affidavit of Sh. Vinay Mittal, Surveyor and Loss Assessor are taken on record subject to just exception of the case. MA/866/2020 stands disposed of accordingly.

12.              MA/229/2022 has been filed by opposite party No.1 seeking permission to place on record documents i.e. Proposal Forms for the issuance of the Policy for the period from 25.01.2011 to 24.01.2012; 25.01.2012 to 24.01.2013 and complete statement of stock and Book debts submitted by the complainant providing details of stock and Book debts as on 31.08.2015 i.e. immediately prior to the alleged theft. Vide this application, opposite party No.1 further sought directions to be issued to opposite party No.2 to submit the proposal forms.  

13.              Opposite party No.2 contested the application by filing its reply wherein it has been stated that office of opposite party No.2 received a letter dated 08.09.2015 from opposite party No.1, on 18.09.2015 i.e. after the date of occurrence of loss i.e. 17.09.2015, for making change of address of claimant as Plot No.258, Industrial Area I (stock address), Chandigarh and House No.127, Makhan Majra adjoining Sampark (stock address). It has further been stated that it is very much clear from the Bank letter that they have not informed opposite party No.2 for change of address under policy No.420101/46/14/75/ 000000376. It has further been stated that the documents which are sought to be allowed to be taken on record are not relevant for the proper adjudication of the case rather the same are liable to be rejected. Lastly prayer for dismissal of application has been made.

14.              After deliberate consideration, this Commission is of the view that the documents sought to be placed on record by opposite party No.1, could have some bearing in the matter and thus, necessary for the just decision of the matter. Accordingly, the application is allowed and the documents i.e. Proposal Forms for the issuance of the Policy for the period from 25.01.2011 to 24.01.2012; 25.01.2012 to 24.01.2013 and complete statement of stock and Book debts submitted by the complainant providing details of stock and Book debts as on 31.08.2015, are taken on record subject to just exception of the case. MA/229/2022 stands disposed of accordingly. However, despite our specific directions issued to Opposite Party No.1 (Bank of India) vide order dated 21.12.2021, the proposal forms for the period 24.01.2013 onwards i.e. up-to the year 2016, which would have more relevancy upon the merits of the case, were not placed on record by Opposite Party No.1 (Bank of India) for the reasons best know to it.

15.              Now coming on to the merits of the case, the factum of issuance/renewal of Insurance Policy; incident of theft, lodging of claim with the opposite parties and repudiation thereof by Opposite Party No.2 (Insurance Company) vide repudiation letter dated 18.10.2016, Annexure C-15, is not in dispute. The questions which falls for determination by this Commission are as under:-

(i)       Whether the fact of change in the address of the complainant from SCO No.283, Sector 32-D, Chandigarh to SCO No.292, Sector 32-D, Chandigarh was brought to the knowledge of the opposite parties or not?

(ii)      Whether opposite party No.2 rightly repudiated the claim of the complainant or not?

(iii)     If the complainant succeeds in establishing its claim, then, to what relief the complainant is entitled to?

16.              After minutely going through the document/evidence on record, the answers to these questions are as follows:-

 

(i)      Whether the fact of change in the address of the complainant from SCO No.283, Sector 32-D, Chandigarh to SCO No.292, Sector 32-D, Chandigarh was brought to the knowledge of the opposite parties or not?

 

 

17.              Bare perusal of letter dated 19.09.2013, Annexure C-3, regarding intimation of change in address, transpires that vide this letter, the complainant duly informed The Manager of opposite party No.1 (Bank of India), Sector 32-D, Chandigarh with regard to the shifting of its office in the month of November 2012, from S.C.O. 283, First Floor Sector 32-D, Chandigarh to S.C.O. 292, Sector Floor, Sector 32-D, Chandigarh. The contents of said letter dated 19.09.2013, Annexure C-3, being relevant reads thus:-

“As already confirmed telephonically, we have shifted our office premises from S.C.O. 283, First Floor, Sector 32-D, Chandigarh to S.C.O. 292, Second Floor, Sector 32-D, Chandigarh in the month of November 2012.

Kindly make the above changes in your records.”

 

18.              Thus, while intimating the change in the address, the complainant also requested opposite party No.1 (Bank of India) to make changes in their records and copy of this letter, as alleged by the complainant was also sent to opposite party No.2 (Insurance Company) through courier, as per courier receipt dated 19.09.2013, placed on record as Annexure C-4, receipt whereof has specifically been denied by opposite party No.2.

19.              Opposite Party No.1 (Bank of India) has admitted the receipt of the aforesaid letter dated 19.09.2013, Annexure C-3, as the said letter also bears the stamp of Bank of India. It is beyond any doubt that the stock of medicines & similar nature of goods were got insured by Opposite Party No.1 (Bank of India) from Opposite Party No.2 (Insurance Company) in order to secure their debts. Thus, when the complainant shifted its office premises from S.C.O. 283, First Floor, Sector 32-D, Chandigarh to S.C.O. 292, Second Floor, Sector 32-D, Chandigarh and duly intimated as regards the same to Opposite Party No.1 (Bank of India), it was the bounden duty of Opposite Party No.1 (Bank of India) to intimate as regards the same to Opposite Party No.1 (Insurance Company) at once, so that the new address could also be up-dated in the records of Opposite Party No.2 (Insurance Company). In this regard, we would like to refer to Memorandum of Understanding (in short MoU) executed between Opposite Party No.1 (Bank of India) and Opposite Party No.2 (National Insurance Company Limited) on 15.10.2003, Annexure OP-2/10. As per Clauses 2 & 3 of said MoU, the Bank has to refer its customers, staff members, borrowers, other general visitors, who are interested in purchasing the various insurance products of opposite party No.2 (Insurance Company) to it and further Opposite Party No.2 (Insurance Company) shall pay to the Bank Referral Fee as stated in Schedule I of the MoU. Thus, Opposite Party No.1 acted as a via-media between the complainant and Opposite Party No.2 in procuring the Policy, in question, in order to secure its debts and was under contract in terms of MoU to supply each and every information to Opposite Party No.2 relating to the complainant, in which it (Opposite Party No.1) failed by not intimating as regards the change in the address of office premises of the complainant to Opposite Party No.2 (Insurance Company). It was the foremost duty of  Opposite Party No.1 (Bank of India) to specifically inform opposite party No.2 (Insurance Company) as regards the change of address by the complainant immediately upon receipt of letter dated 19.09.2013, which makes Opposite Party No.1 liable to compensate the complainant for such lapse, laxity and deficiency in service on its part. Not only above, for the laxity on the part of Opposite Party No.1 (Bank of India), Opposite Party No.2 also wants to make the complainant, a scapegoat, by repudiating its genuine claim.

20.              In order to escape its liability, Opposite Party No.2 (Insurance Company) has  taken a stand that changed address of the office premises of the complainant (S.C.O. 292, Second Floor, Sector 32-D, Chandigarh) was not in its knowledge and further Opposite Party No.1 (Bank of India) did not inform it qua change of address. Opposite Party No.2 has categorically denied receipt of aforesaid letter dated 19.09.2013, Annexure C-3 sent by the complainant through courier.  Reliance has been placed on the judgment of this Commission in the case of Punam Adak Versus Canara Bank & Anr., Consumer Complaint No.5 of 2019 decided on 19.05.2022, which was dismissed by this Commission by observing that the complainant, in the said case, had failed to place on record any document to convince this Commission that there was any privity of contract with Canara Bank, as far as obtaining of insurance policy was concerned. Further the complainant in the said case had also failed to place on record any cogent and convincing document to prove that in case there was any change/shifting of insured location and stocks kept thereat, intimation in that regard was to be first given to Canara Bank, which in turn was to convey the same to the Insurance Company. However, it is not the position in the instant case. The complainant duly intimated as regards the change of its office premises address to Opposite Party No.1 (Bank of India) vide letter dated 19.09.2013, Annexure C-3 and also endorsed the copy of said letter dated 19.09.2013 to Opposite Party No.2 (Insurance Company). Opposite Party No.1 (Bank of India) was also required to convey the same to Opposite Party No.2 (Insurance Company) and further, for obtaining the Policy, in question, there was a specific MoU executed inter-se both the opposite parties. Now, Opposite Party No.2 cannot absolve its liability on mere saying that it did not receive the copy of letter dated 19.09.2013 through courier. This plea of opposite party No.2 seems to be an afterthought just to defeat the claim of the complainant. Thus, no help can be derived by Opposite Party No.2 (Insurance Company) out of Punam Adak’s case (supra). Further the judgment in case Rotex Automation Ltd. Versus United India Insurance Co. Ltd., IV (2015) CPJ 560 (NC), reliance whereupon has been placed by Opposite Party No.2 (Insurance Company) is also distinguishable on facts and is thus, of no help to Opposite Party No.2.

21.              It may also be stated here that in the first instance, there was no role of the complainant except the fact that only premium was to be paid by the complainant and that too, the same was to be directly debited by Opposite Party No.1 from the account of the complainant, for onward payment to Opposite Party No.2 (Insurance Company) and secondly, there was also negligence on the part of Opposite Party No.2 (Insurance Company), as it failed to check the details of the changed address of the complainant. Though it (Opposite Party No.2) has denied receipt of letter dated 19.09.2013, Annexure C-3 but it cannot be ignored that insurance policies were issued by Opposite Party No.2 (Insurance Company), after physical verification of the stocks/goods, kept in the premises of the complainant. Before issuing the insurance policies, in question, the Officials of Opposite Party No.2 (Insurance Company), might have visited the premises of the complainant, for stocks/goods verification, to ascertain the extent of sum assured to be granted in that regard, so that they are able to recover premium assessed accordingly.  If that is so, then definitely, the Officials of Opposite Party No.2 (Insurance Company) would have visited changed address of the office premises of the complainant (S.C.O. 292, Second Floor, Sector 32-D, Chandigarh), for stocks/goods verification.

                   Not only above, the deficiency in rendering service on the part of Opposite Party No.2 (Insurance Company) further stands corroborated from document i.e. proposal Form for Standard Fire & Special Peril Policy, for the period 25.01.2012 to 24.01.2013, placed on record by Opposite Party No.1 (Bank of India) alongwith the affidavit of Sh. Kamal Kumar Hira, Assistant General Manager, Bank of India, Sector 32, Chandigarh. A bare perusal of this Proposal Form clearly transpires that in this proposal form, the address of the complainant, against Sr. No.5 meant for “Location of risk to be covered full postal address with pincode”, was mentioned as “SCO. 292 (2^nd Floor), Sec. 32 D, Chd.”, which address was the newly located address of the complainant, where the stocks were kept. This makes it crystal clear and beyond doubt, that the changed address was very much in the knowledge of Opposite Party No.2 (Insurance Company) in the year 2012-2013. Thus, as discussed in the preceding paragraph, denial qua receipt of letter dated 19.09.2013, Annexure C-3, by Opposite Party No.2 is an afterthought just to defeat the rightful claim of the complainant. In that eventuality, the stand taken by Opposite Party No.2 that changed address of the office premises of the complainant (S.C.O. 292, Second Floor, Sector 32-D, Chandigarh) was not in its knowledge and further the complainant was operating from both the old and the changed addresses, has no legs to stand. It is also important to mention here that the subsequent Insurance Policies i.e. for the period 24.01.2013 onwards i.e. up-to the year 2016 would have been issued by Opposite Party No.2 (Insurance Company) only after verification of the stock lying at the changed address by their officials. As such, under these circumstances, Opposite Party No.2 (Insurance Company) cannot absolve itself, from the deficiencies flown out, of its own act and conduct, referred to above.

(ii) Whether opposite party No.2 rightly repudiated the claim of the complainant or not? and;

 

(iii) If the complainant succeeds in establishing its claim, then, to what relief the complainant is entitled to?

 

22.              In the wake of above answer to Issue No.(i), we are of the concerted view that the repudiation of the claim done by Opposite Party No.2 (Insurance Company) vide repudiation letter dated 18.10.2016, Annexure C-15, saying that  the premises was not insured under the policy on the date of loss, is illegal and arbitrary. In Sikka Papers Limited Vs. National Insurance Company Limited, (2009) 7 Supreme Court Cases 777, it was held that, no doubt, the report of the Surveyor is not the last word, yet there must be legitimate reason, for departing from the same.  In  New India Assurance Company Ltd. Vs. Rabindra Narayan, I (2010) CPJ 80 (NC), it was held that the Surveyor’s report, being an important piece of evidence, was required to be given weight and relied upon, unless proved unreliable. In Dabirudin Cold Storage Vs. New India Assurance Company Ltd. & Ors., I (2010) CPJ 141 (NC), it was held that the Surveyor’s report, being an important document, cannot be easily brushed aside. In view of the settled law, there is no justification with Opposite Party No.2 (Insurance Company to ignore the assessment made by its own Surveyor (M/s Protocol Insurance Surveyors & Loss Assessors Pvt. Ltd.) in its report dated 21.04.2016, Annexure OP-2/5, wherein the net payable loss has been assessed to the extent of Rs.36,42,171/-. Clearly, denial of claim despite assessment of the same by the Surveyor in the sum of Rs.36,42,171/- on arbitrary ground, amounted to deficiency and unfair trade practice on the part of Opposite Party No.2 (Insurance Company). In view of above discussion, the complainant is entitled to claim in the sum of Rs.36,42,171/-.

23.              From the sequence of events narrated above, it can easily be said that both the opposite parties are deficient in providing            service and guilty of adoption of unfair trade practice. Thus, for deficiency in rendering service and indulgence into unfair trade practice, the complainant is also held entitled to adequate compensation.

24.              For the reasons recorded above, this complaint is partly accepted, with costs, with following directions:-

1. Opposite Party No.2 (Insurance Company) is directed to pay the claim amount of Rs.36,42,171/- as assessed by the Surveyor, to the complainant, alongwith interest @9% p.a., from 18.10.2016 (date of repudiation of claim) within a period of 30 days, from the date of receipt of a certified copy of this order, failing which it shall thereafter carry penal interest @12% p.a. from the date of default i.e. after expiry of 30 days’ period till realization.
2. Opposite Party No.1 (Bank of India) shall pay compensation, in the sum of Rs.3,00,000/- for causing deficiency in providing service, negligence and unfair trade practice, to the complainant, within a period of 30 days, from the date of receipt of certified copy of this order, failing which it shall thereafter carry penal interest @9% p.a. from the date of default i.e. after expiry of 30 days’ period till realization.
3. Opposite Parties No.1 and 2, jointly and severally, shall pay cost of litigation, to the tune of Rs.50,000/- to the  complainant, within a period of 30 days, from the date of receipt of certified copy of this order, failing which it shall thereafter carry penal interest @9% p.a. from the date of default i.e. after expiry of 30 days’ period till realization.

25.              Certified copies of this order be sent to the parties free of charge.

26.           File be consigned to Record Room after completion.

Pronounced

07.07.2022.

[RAJ SHEKHAR ATTRI]

PRESIDENT

 

 

(PADMA PANDEY)

MEMBER

 

 

 

 

(RAJESH K. ARYA)

MEMBER

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